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METALS-Copper steady on strong China data, tightening fears
Thu Jan 21, 2010 10:49am GMT
Print | Single Page
[-] Text [+]
* China Q4 2009 GDP up 10.7 pct on year, Dec CPI up 1.9 pct
* China Dec copper output 418,000 T, slightly lower on
month
* Refined copper imports up 26 pct on mth at 244,013
tonnes
(Updates prices; adds China trade data)
By Rujun Shen and Jacqueline Wong
SHANGHAI, Jan 21 (Reuters) - Copper was steady on Thursday,
after data showed China's economic growth accelerated in the
last quarter of the year, fueling worries over further
tightening of China's monetary policy.
China's economy finished 2009 with a flourish, as a 10.7
percent annual increase in fourth-quarter GDP took full-year
growth to 8.7 percent, easily surpassing Beijing's 8 percent
target. [ID:nTOE60K011]
"Obviously the month-on-month growth momentum is very
strong," said Xing Ziqiang, an economist at CICC in Beijing.
"So I think the chances for us to see an interest rate rise in
the first quarter are increasing."
An acceleration in consumer inflation to 1.9 percent in the
12 months to December from November's 0.6 percent figure is
likely to reinforce worries about possible economic overheating
on the back of a renewed surge in bank lending.
"I think it's bad news for base metals, and copper in
particular. Fixed asset investment is lower, and inflation
higher, which basically means demand is down and inflation is
up," said a trader based in Singapore.
"Rate hiking and currency appreciation have to come
quicker."
In another gesture towards tightening liquidity, China's
central bank raised the yield again on its three-month bills in
its regular open market operations on Thursday.